1 00:00:40,409 --> 00:00:46,159 Suze: January 28th, 2024. Welcome everybody to the Women and Money 2 00:00:46,168 --> 00:00:50,650 Suze: podcast as well as everybody smart enough to listen, Suze 3 00:00:50,689 --> 00:00:54,680 Suze: O here and today is Suze School and of course, 4 00:00:54,689 --> 00:01:00,180 Suze: today is also the final playoffs before the Super Bowl 5 00:01:00,189 --> 00:01:04,099 Suze: for the NFL. I don't even know who I'm rooting 6 00:01:04,110 --> 00:01:06,399 Suze: for besides obviously Kansas City. 7 00:01:06,769 --> 00:01:10,669 Suze: You know, because I'm originally kind of from San Francisco 8 00:01:10,889 --> 00:01:14,790 Suze: for 23 years of my life, but I am so 9 00:01:14,800 --> 00:01:18,059 Suze: somebody who roots for the underdog and I have to 10 00:01:18,069 --> 00:01:23,009 Suze: tell you Detroit, I'm a rooting for you here, but 11 00:01:23,019 --> 00:01:25,179 Suze: if you end up in the Super bowl against the 12 00:01:25,190 --> 00:01:26,629 Suze: Kansas City Chiefs, 13 00:01:26,989 --> 00:01:29,699 Suze: well, I'm gonna go with the Kansas City Chiefs all 14 00:01:29,709 --> 00:01:32,550 Suze: the way, whether they win or not, they're always gonna 15 00:01:32,559 --> 00:01:35,649 Suze: be the team I root for or at least as 16 00:01:35,660 --> 00:01:39,779 Suze: long as Mahomes is quarterback there. Anyway, few things, an 17 00:01:39,790 --> 00:01:43,489 Suze: announcement and I want you to take this to heart 18 00:01:44,059 --> 00:01:48,440 Suze: as you know, Alliant Credit Union has some of, if 19 00:01:48,449 --> 00:01:53,860 Suze: not the highest interest rates on their certificates of deposits, 20 00:01:53,970 --> 00:01:58,680 Suze: especially their 18 month one. And remember it can be 21 00:01:58,690 --> 00:02:03,220 Suze: 18 months all the way up to 23 months and 22 00:02:03,230 --> 00:02:06,319 Suze: really 30 days, which makes it almost a two year 23 00:02:06,330 --> 00:02:10,279 Suze: certificate of deposit. You choose your maturity 24 00:02:10,979 --> 00:02:15,720 Suze: currently, that interest rate is at 5.3% 25 00:02:17,020 --> 00:02:25,710 Suze: or 5.35% for amounts that are $75,000 or more. Remember, 26 00:02:25,720 --> 00:02:30,690 Suze: you only need $1000 to lock up that rate. 27 00:02:31,600 --> 00:02:33,589 Suze: I have told you and I'm going to tell you 28 00:02:33,600 --> 00:02:37,610 Suze: again when interest rates start to go down as they are. 29 00:02:37,619 --> 00:02:38,279 Suze: Now 30 00:02:39,038 --> 00:02:42,538 Suze: that I did not know how long, especially on the 31 00:02:42,550 --> 00:02:46,210 Suze: longer term one, I'm not worried about the 12 month one, 32 00:02:46,220 --> 00:02:51,008 Suze: which is currently, by the way at 5.4%. And remember 33 00:02:51,020 --> 00:02:53,740 Suze: the 12 month one can also go from 12 months 34 00:02:53,750 --> 00:02:57,339 Suze: all the way up to 17 months and 30 days, 35 00:02:57,350 --> 00:02:59,899 Suze: which essentially makes it 18 months. 36 00:03:00,538 --> 00:03:08,389 Suze: But that rate is at 5.4% for anything under $75,000 37 00:03:08,399 --> 00:03:15,580 Suze: and 5.45% for amounts of $75,000 or more. But let's 38 00:03:15,589 --> 00:03:19,309 Suze: get back to the 18 month because it's the longer 39 00:03:19,320 --> 00:03:25,198 Suze: term rates right now that are starting to come down everywhere. 40 00:03:25,550 --> 00:03:30,038 Suze: When I see rates starting to be lowered on 18 41 00:03:30,050 --> 00:03:33,490 Suze: month CDs, two year CDs at many of the major 42 00:03:33,500 --> 00:03:38,990 Suze: financial institutions. What that says to me is that sooner 43 00:03:39,000 --> 00:03:43,509 Suze: than later Alliant Credit Union will absolutely do the same 44 00:03:43,520 --> 00:03:49,009 Suze: thing on their 18 to 23 month certificate of deposit. 45 00:03:49,289 --> 00:03:54,089 Suze: So if you are somebody who wanted to lock in 46 00:03:54,100 --> 00:03:57,199 Suze: the current interest rates there for a longer period of 47 00:03:57,210 --> 00:03:57,789 Suze: time 48 00:03:58,740 --> 00:04:03,410 Suze: for right now, I'm telling you, you do not have 49 00:04:03,419 --> 00:04:08,250 Suze: time to waste as you are listening to this again 50 00:04:08,259 --> 00:04:12,929 Suze: on January 28th, I would imagine you have two or 51 00:04:12,940 --> 00:04:14,600 Suze: three days left 52 00:04:15,470 --> 00:04:20,149 Suze: to actually do that before those rates may change. Now, 53 00:04:20,160 --> 00:04:22,690 Suze: I don't know that for a fact. Nobody has said 54 00:04:22,700 --> 00:04:25,649 Suze: anything to me that it's just one of those things 55 00:04:25,660 --> 00:04:30,500 Suze: because remember I watch interest rates everywhere all the time. 56 00:04:30,540 --> 00:04:33,850 Suze: I actually watch them more than I do stock prices 57 00:04:34,399 --> 00:04:37,429 Suze: and I just have a feeling. So if you're interested 58 00:04:37,440 --> 00:04:42,010 Suze: in the longer term, the 18 to 23 month certificate 59 00:04:42,019 --> 00:04:48,190 Suze: of deposit at Alliant Credit Union, go to my Alliant... 60 00:04:48,600 --> 00:04:57,058 Suze: That's myalliant.com. Look for my picture. It is there. And again, 61 00:04:57,359 --> 00:04:59,619 Suze: if you want to lock in for a little bit shorter, 62 00:04:59,630 --> 00:05:01,649 Suze: the 12 to 17 month, 63 00:05:02,000 --> 00:05:08,420 Suze: don't pass up the 5.4 or 5.45% on that one 64 00:05:08,428 --> 00:05:12,359 Suze: because you never know when that 1 may change as well. 65 00:05:12,369 --> 00:05:17,609 Suze: We'll have to see what happens today. Absolutely. Get out 66 00:05:17,619 --> 00:05:20,750 Suze: your little Suze notebooks. I bet you they're not so 67 00:05:20,760 --> 00:05:22,019 Suze: little anymore. 68 00:05:22,690 --> 00:05:25,269 Suze: I bet you they are getting thicker and thicker 69 00:05:26,119 --> 00:05:31,510 Suze: and I was thinking how I've been talking a lot about, obviously, 70 00:05:31,519 --> 00:05:36,149 Suze: as I always do retirement accounts. And a little bit 71 00:05:36,160 --> 00:05:41,390 Suze: ago I did a thing on retirement accounts versus investment 72 00:05:41,399 --> 00:05:45,910 Suze: accounts and then somebody wrote in and they asked me, 73 00:05:45,920 --> 00:05:50,510 Suze: would I do a Suze school on the 55 or 74 00:05:50,519 --> 00:05:51,899 Suze: older rule. 75 00:05:52,690 --> 00:05:55,099 Suze: And I thought, you know what, I think it's kind 76 00:05:55,109 --> 00:05:58,789 Suze: of time to do that again because I think it's 77 00:05:58,799 --> 00:06:06,720 Suze: really important that you understand why a 401k especially a pretext, 78 00:06:06,730 --> 00:06:10,739 Suze: one gives you more accessibility to your money as you 79 00:06:10,750 --> 00:06:16,950 Suze: get older than a traditional Ira. Ok. 80 00:06:17,859 --> 00:06:20,480 Suze: I need you to listen to me for a second, here. 81 00:06:21,178 --> 00:06:24,720 Suze: There are many times that things happen in your life, 82 00:06:25,640 --> 00:06:30,339 Suze: whether it's expected or unexpected, they just happen. And one 83 00:06:30,350 --> 00:06:36,100 Suze: of those things possibly could be that as you're approaching 84 00:06:36,109 --> 00:06:41,308 Suze: your late fifties or your middle fifties, either something happens 85 00:06:41,320 --> 00:06:48,070 Suze: and you cannot work anymore, but yet you need access 86 00:06:48,089 --> 00:06:51,820 Suze: to the money that's in your 401k plan. 87 00:06:52,760 --> 00:06:56,059 Suze: But yet you can't take a loan from it at 88 00:06:56,070 --> 00:06:57,349 Suze: this point in time 89 00:06:58,269 --> 00:07:01,489 Suze: because you won't be working there anymore 90 00:07:02,440 --> 00:07:09,649 Suze: or you can't withdraw it without penalty in your mind anyway, 91 00:07:09,839 --> 00:07:13,779 Suze: until you're at least 59 and a half years of age. 92 00:07:14,519 --> 00:07:18,640 Suze: So I want to introduce you to something that most 93 00:07:18,649 --> 00:07:23,260 Suze: people don't even have a clue that exists and why 94 00:07:23,269 --> 00:07:27,600 Suze: it exists only in a 401k plan and not in 95 00:07:27,609 --> 00:07:34,059 Suze: an IRA and that is called the rule of 55 96 00:07:34,779 --> 00:07:38,359 Suze: and what the rule of 55 says and this is 97 00:07:38,369 --> 00:07:44,720 Suze: for 401k, 403 B and TSP plans only. 98 00:07:45,970 --> 00:07:47,109 Suze: It says 99 00:07:47,890 --> 00:07:51,529 Suze: if you separate from service, 100 00:07:52,260 --> 00:07:57,380 Suze: that means if you are fired, if you leave voluntarily, 101 00:07:57,390 --> 00:08:02,149 Suze: it does not matter why you leave or quit the 102 00:08:02,160 --> 00:08:06,029 Suze: place that you are working at again, even if you 103 00:08:06,040 --> 00:08:06,880 Suze: are fired 104 00:08:07,980 --> 00:08:12,359 Suze: and you have a 403 B 401k or TSP, an 105 00:08:12,369 --> 00:08:13,920 Suze: employer sponsored plan. 106 00:08:14,670 --> 00:08:16,970 Suze: And you have money in that plan 107 00:08:18,040 --> 00:08:20,769 Suze: that if you separate service 108 00:08:21,760 --> 00:08:27,450 Suze: when you are 55 years of age or older in 109 00:08:28,190 --> 00:08:33,450 Suze: now underline in, in the year that you terminate service, 110 00:08:34,020 --> 00:08:36,849 Suze: you can access any money 111 00:08:37,799 --> 00:08:40,150 Suze: in your employer sponsored plan 112 00:08:40,919 --> 00:08:48,137 Suze: without the 10% penalty. That is a big deal. Everybody, 113 00:08:48,439 --> 00:08:53,698 Suze: it gives you access to the money in your 401k 114 00:08:53,729 --> 00:08:55,578 Suze: and alike plans. 115 00:08:56,549 --> 00:09:01,049 Suze: Now, I want you to understand exactly how this rule 116 00:09:01,059 --> 00:09:03,450 Suze: works because many of you think 117 00:09:04,570 --> 00:09:08,329 Suze: if your money is in a retirement plan, whether it's 118 00:09:08,340 --> 00:09:12,900 Suze: a 401k and just let's now say when I say 401k, 119 00:09:12,989 --> 00:09:16,549 Suze: I mean, all of them at work, 403 B or 120 00:09:16,559 --> 00:09:17,348 Suze: TSP 121 00:09:19,940 --> 00:09:24,689 Suze: that you have to be 59 and a half or older to access 122 00:09:24,700 --> 00:09:30,239 Suze: that money without a 10% federal tax penalty and whatever 123 00:09:30,250 --> 00:09:34,150 Suze: your state tax penalty may be as well. 124 00:09:34,830 --> 00:09:37,849 Suze: But for money in a 401k, 125 00:09:39,039 --> 00:09:44,020 Suze: if you separate service in the year that you turn 126 00:09:44,030 --> 00:09:51,630 Suze: 55 or older there is no 10% penalty. Now, why 127 00:09:51,640 --> 00:09:54,859 Suze: did I ask you to underline the word in? 128 00:09:55,520 --> 00:10:01,978 Suze: Because let's say it is right now January of 2024. 129 00:10:02,830 --> 00:10:05,200 Suze: And right now you are 54 130 00:10:05,940 --> 00:10:13,709 Suze: and your birth date is December 31st 2024 when you 131 00:10:13,719 --> 00:10:16,320 Suze: are going to turn 55. 132 00:10:17,039 --> 00:10:20,858 Suze: But in February of this year, 133 00:10:21,929 --> 00:10:22,750 Suze: you quit, 134 00:10:23,440 --> 00:10:27,460 Suze: you get sick, you have to leave service, they fire you. 135 00:10:27,469 --> 00:10:31,520 Suze: The reason you leave service or separate service does not 136 00:10:31,530 --> 00:10:32,260 Suze: matter 137 00:10:33,280 --> 00:10:36,700 Suze: the fact that you are going to be 55 or 138 00:10:36,710 --> 00:10:37,619 Suze: older 139 00:10:38,609 --> 00:10:41,650 Suze: in the year that you left service, which you would 140 00:10:41,659 --> 00:10:49,340 Suze: be in this example because you turn 55 December 31st, 2024. 141 00:10:49,349 --> 00:10:54,570 Suze: Even though it is the last day of 2024 you 142 00:10:54,580 --> 00:11:01,510 Suze: still qualify for the 55 or older rule, which means 143 00:11:01,859 --> 00:11:06,330 Suze: you can access any of the money within your 401k 144 00:11:06,340 --> 00:11:07,770 Suze: at that point 145 00:11:08,469 --> 00:11:11,710 Suze: or whenever you want after that without having to wait 146 00:11:11,719 --> 00:11:13,130 Suze: till 59 and a half 147 00:11:13,919 --> 00:11:19,880 Suze: without penalty. Now, obviously, especially if it's a traditional 401k, 148 00:11:20,289 --> 00:11:23,340 Suze: you're going to have to pay ordinary income taxes on it, 149 00:11:23,580 --> 00:11:26,940 Suze: but not having to pay 10% to the government in 150 00:11:26,950 --> 00:11:30,820 Suze: penalty and whatever your state penalty is, it could be 2%. 151 00:11:32,150 --> 00:11:35,520 Suze: That is like I said, a big deal. 152 00:11:36,159 --> 00:11:39,140 Suze: Now, the reason that I want to tell you this 153 00:11:39,659 --> 00:11:43,539 Suze: is that many of you when you quit or you 154 00:11:43,549 --> 00:11:47,848 Suze: leave or you're fired and you have money in a 401k. 155 00:11:48,739 --> 00:11:51,359 Suze: You tend, and I have told you to do this, 156 00:11:51,530 --> 00:11:56,380 Suze: you tend to take the money in your 401k and 157 00:11:56,390 --> 00:12:01,340 Suze: roll it over to an IRA rollover account where you 158 00:12:01,349 --> 00:12:05,199 Suze: have many more investment choices and things like that. 159 00:12:05,900 --> 00:12:11,679 Suze: But in an IRA of any kind, the 55 or 160 00:12:11,690 --> 00:12:18,280 Suze: older rule does not apply there. You have to wait 161 00:12:18,479 --> 00:12:24,469 Suze: in most cases till you're 59 and a half years of age or older. Now, 162 00:12:24,479 --> 00:12:27,919 Suze: I will explain another rule for IRAs in a second 163 00:12:28,460 --> 00:12:31,729 Suze: that allows you to get to your money without the 10% 164 00:12:31,739 --> 00:12:34,349 Suze: penalty regardless of your age. 165 00:12:34,890 --> 00:12:38,710 Suze: But here is my advice to all of you 166 00:12:39,820 --> 00:12:43,400 Suze: if you are not 59 and a half years of age yet, 167 00:12:44,299 --> 00:12:49,429 Suze: and you have left service or plan to leave service, 168 00:12:49,440 --> 00:12:52,960 Suze: maybe to find another job, maybe to retire and you 169 00:12:52,969 --> 00:12:58,429 Suze: have money in a 401k plan at your employer. 170 00:12:59,239 --> 00:13:04,299 Suze: Soon to be your ex-employer and you are under the 171 00:13:04,309 --> 00:13:10,070 Suze: age of 59 and a half. But you are going to turn 55 172 00:13:10,080 --> 00:13:13,659 Suze: years of age or older in the year that you're 173 00:13:13,669 --> 00:13:19,619 Suze: leaving service. Maybe look at rolling some of the money 174 00:13:19,630 --> 00:13:25,080 Suze: over to an Ira rollover, but leave an amount in 175 00:13:25,090 --> 00:13:27,500 Suze: your 401k plan 176 00:13:28,809 --> 00:13:32,570 Suze: that you may think you need to access over the 177 00:13:32,580 --> 00:13:36,760 Suze: next few years and you want to access it without 178 00:13:36,900 --> 00:13:41,988 Suze: the 10% federal penalty and whatever the state penalty is 179 00:13:42,000 --> 00:13:42,760 Suze: going to be. 180 00:13:43,840 --> 00:13:46,880 Suze: Did that make sense to you? So, when I was 181 00:13:46,890 --> 00:13:51,260 Suze: doing the retirement planning for all of Pacific Gas and Electric, 182 00:13:51,409 --> 00:13:55,580 Suze: the utility company in northern California, and they had early 183 00:13:55,590 --> 00:14:01,270 Suze: retirement many times and about 7000 people retired the last 184 00:14:01,280 --> 00:14:03,140 Suze: time I did it for them before I went out 185 00:14:03,150 --> 00:14:06,739 Suze: on my own. I had all of these people because 186 00:14:06,750 --> 00:14:08,739 Suze: it was early retirement. 187 00:14:09,119 --> 00:14:12,520 Suze: Most of them had just turned or were going to 188 00:14:12,530 --> 00:14:17,590 Suze: turn 55 years of age or older in the year 189 00:14:17,599 --> 00:14:21,020 Suze: that they were choosing to take early retirement. 190 00:14:21,789 --> 00:14:25,960 Suze: I had many of them leave the money that they 191 00:14:25,969 --> 00:14:31,130 Suze: would need to get all the way through to 59 and a half 192 00:14:31,140 --> 00:14:36,330 Suze: right in their 401k at Pacific Gas and Electric 193 00:14:37,440 --> 00:14:40,489 Suze: for the money above that, that they knew they were 194 00:14:40,500 --> 00:14:44,059 Suze: not going to need that money we did in IRA 195 00:14:44,070 --> 00:14:48,289 Suze: rollover with. So you do not have to be an 196 00:14:48,299 --> 00:14:53,489 Suze: all or nothing investor where you do something with all 197 00:14:53,500 --> 00:14:56,340 Suze: of your money or you do nothing with all of 198 00:14:56,349 --> 00:14:59,739 Suze: your money. You have choices, 199 00:15:00,450 --> 00:15:04,000 Suze: but this is something that you absolutely need to know 200 00:15:04,010 --> 00:15:09,159 Suze: about because for the Women and Money Podcast, my listeners 201 00:15:09,169 --> 00:15:13,349 Suze: tend to be older in their fifties. 202 00:15:13,929 --> 00:15:17,109 Suze: And so I know you're like, so I don't feel 203 00:15:17,119 --> 00:15:19,640 Suze: like that's older, but you know what I'm talking about. 204 00:15:19,650 --> 00:15:22,150 Suze: All right, so don't get insulted on me. Here. But 205 00:15:22,239 --> 00:15:26,150 Suze: this is something that you need to keep in mind 206 00:15:26,280 --> 00:15:30,349 Suze: if anything happens to you and you need to separate 207 00:15:30,359 --> 00:15:34,710 Suze: from service in the year that you are going to 208 00:15:34,719 --> 00:15:38,109 Suze: be 55 or older. 209 00:15:38,690 --> 00:15:42,280 Suze: I just have to say something. Obviously, if you are 210 00:15:42,289 --> 00:15:48,690 Suze: 59 and a half already, none of this matters because now you already 211 00:15:48,700 --> 00:15:54,549 Suze: have attained the age that the 10% penalty does not apply. 212 00:15:55,059 --> 00:15:59,340 Suze: So for you, if you wanted to, you could absolutely 213 00:15:59,349 --> 00:16:03,109 Suze: do an IRA rollover with all of the money in 214 00:16:03,119 --> 00:16:04,590 Suze: your 401k 215 00:16:05,010 --> 00:16:11,630 Suze: and it really won't matter in most cases. Next, maybe 216 00:16:11,710 --> 00:16:17,200 Suze: you've already separated from service. You were not 55 years 217 00:16:17,210 --> 00:16:20,830 Suze: of age or older or you were 55 but you 218 00:16:20,840 --> 00:16:25,750 Suze: didn't know about this rule. Maybe you were 5657 and 219 00:16:25,760 --> 00:16:30,049 Suze: you did an IRA rollover with all of the money 220 00:16:30,059 --> 00:16:32,030 Suze: within your 401k 221 00:16:32,719 --> 00:16:36,179 Suze: and now it's sitting in an IRA 222 00:16:36,960 --> 00:16:41,900 Suze: but you cannot access it until the age of 59 and a half 223 00:16:41,909 --> 00:16:48,020 Suze: without the 10% penalty. Here's something else you need to know. 224 00:16:48,599 --> 00:16:53,260 Suze: Let's say you are in a situation and now you've left, 225 00:16:53,440 --> 00:16:56,320 Suze: you haven't been able to find another job that you want, 226 00:16:56,400 --> 00:17:00,590 Suze: but you need that money that's in there that's locked 227 00:17:00,599 --> 00:17:04,540 Suze: up in your mind for another two years or three years. 228 00:17:04,550 --> 00:17:06,339 Suze: Maybe even a lot longer 229 00:17:06,930 --> 00:17:10,050 Suze: rather than just taking it out and paying a penalty again. 230 00:17:10,060 --> 00:17:13,709 Suze: You're always gonna have to pay ordinary income taxes on 231 00:17:13,719 --> 00:17:17,919 Suze: it unless it was a Roth 401k or Roth IRA 232 00:17:18,920 --> 00:17:24,239 Suze: or you did an IRA rollover and then converted to 233 00:17:24,250 --> 00:17:28,780 Suze: a Roth IRA and then started to take money from there. 234 00:17:29,510 --> 00:17:32,959 Suze: But if you haven't done that and your money is 235 00:17:32,969 --> 00:17:38,889 Suze: in a traditional IRA rollover from your 401k, let's say, 236 00:17:38,900 --> 00:17:41,959 Suze: or even if you just have money in a traditional Ira, 237 00:17:42,510 --> 00:17:48,369 Suze: there's something known as the rule of 72 T 238 00:17:49,410 --> 00:17:53,369 Suze: that is in the IRS code of it. And what 239 00:17:53,380 --> 00:17:57,750 Suze: it says is you can take money out 240 00:17:58,420 --> 00:18:01,430 Suze: of your traditional IRA 241 00:18:02,270 --> 00:18:05,520 Suze: without the 10% penalty. 242 00:18:06,310 --> 00:18:08,560 Suze: As long as you take it out 243 00:18:09,260 --> 00:18:15,680 Suze: with something that is known as separate but equal periodic payments. 244 00:18:16,369 --> 00:18:20,079 Suze: Those payments could be once a year, those payments could 245 00:18:20,089 --> 00:18:24,839 Suze: be every month, those payments could be every quarter, but 246 00:18:24,849 --> 00:18:27,380 Suze: those payments have to be separate, 247 00:18:28,189 --> 00:18:34,589 Suze: but they have to be equal every single withdrawal 248 00:18:35,390 --> 00:18:39,280 Suze: and you have to do it, write this down for 249 00:18:39,290 --> 00:18:41,709 Suze: at least five years 250 00:18:43,040 --> 00:18:49,419 Suze: or 59 and a half, whichever one comes later. 251 00:18:50,540 --> 00:18:54,920 Suze: So what that means is this is something that you 252 00:18:54,930 --> 00:18:59,319 Suze: can think about doing if you're in your mid fifties. 253 00:18:59,569 --> 00:19:03,290 Suze: This is not something that I recommend you do just 254 00:19:03,300 --> 00:19:06,869 Suze: to get at your money without the 10% penalty 255 00:19:07,380 --> 00:19:10,520 Suze: when you're in your thirties or your forties. This is 256 00:19:10,530 --> 00:19:14,599 Suze: what you do when you're approximately 55 years of age 257 00:19:14,660 --> 00:19:17,319 Suze: and you need access to your money and you want 258 00:19:17,329 --> 00:19:20,739 Suze: to do so without the 10% penalty. 259 00:19:22,010 --> 00:19:26,550 Suze: If you do that and you take these withdrawals out 260 00:19:26,979 --> 00:19:30,270 Suze: every month or every few months, whatever it may be 261 00:19:30,760 --> 00:19:36,430 Suze: for at least five years or 59 and a half, whichever one comes later, 262 00:19:38,130 --> 00:19:42,550 Suze: then you will not have to pay the 10% federal 263 00:19:42,560 --> 00:19:47,629 Suze: tax penalty as well as the state penalty if you 264 00:19:47,640 --> 00:19:50,369 Suze: live in a state that charges a penalty. 265 00:19:51,069 --> 00:19:55,010 Suze: Now, remember everybody with the two strategies that I talked 266 00:19:55,020 --> 00:20:00,719 Suze: about today, you absolutely will owe ordinary income taxes on 267 00:20:00,729 --> 00:20:05,238 Suze: whatever withdrawals you make. Regardless of your age. 268 00:20:07,079 --> 00:20:11,500 Suze: Both these rules can be pretty complicated 269 00:20:12,459 --> 00:20:16,000 Suze: and you really need to know, especially if you do 270 00:20:16,010 --> 00:20:19,959 Suze: the 72 T so you need to work with your 271 00:20:19,969 --> 00:20:21,319 Suze: tax advisor. 272 00:20:22,219 --> 00:20:27,469 Suze: Especially again, I'm repeating if you do rule 72 T. 273 00:20:27,609 --> 00:20:31,079 Suze: Now when I was doing the retirement planning for Pacific 274 00:20:31,089 --> 00:20:34,170 Suze: Gas and Electric, I have to say I became an 275 00:20:34,180 --> 00:20:39,719 Suze: incredible expert on this. Probably I knew more about it 276 00:20:39,729 --> 00:20:45,119 Suze: than anybody in the entire United States because I advised 277 00:20:45,130 --> 00:20:49,879 Suze: thousands of people about these rules, especially if they did 278 00:20:49,890 --> 00:20:51,979 Suze: rule 72 T... 279 00:20:52,439 --> 00:20:55,479 Suze: I figured out for them exactly how much they should 280 00:20:55,489 --> 00:21:00,140 Suze: take out. These are two things that are really, really 281 00:21:00,150 --> 00:21:04,050 Suze: important for you to know about. And even if you 282 00:21:04,060 --> 00:21:07,540 Suze: are younger right now, you're listening to this and you 283 00:21:07,550 --> 00:21:10,579 Suze: think it doesn't apply to you. If you think you're 284 00:21:10,589 --> 00:21:13,099 Suze: not gonna get older. If you think you're not going 285 00:21:13,109 --> 00:21:17,369 Suze: to be one day 40 50 60 70. 286 00:21:17,880 --> 00:21:21,180 Suze: Well, I have a bridge to sell you. You wanna 287 00:21:21,189 --> 00:21:24,359 Suze: get older? You don't want the alternative, which means you 288 00:21:24,369 --> 00:21:28,979 Suze: never got there. You want to really get older but 289 00:21:28,989 --> 00:21:33,359 Suze: you wanna get older and you wanna be healthy. So 290 00:21:33,369 --> 00:21:37,099 Suze: you wanna stay exercising and eat the right food and 291 00:21:37,109 --> 00:21:39,640 Suze: know the right moves to make when it comes to 292 00:21:39,650 --> 00:21:42,989 Suze: your health. So as you get older, you don't feel 293 00:21:43,000 --> 00:21:44,339 Suze: like you're aging 294 00:21:45,260 --> 00:21:48,060 Suze: and when it comes to your money, you want to 295 00:21:48,069 --> 00:21:50,280 Suze: do the same thing, you want to work with it 296 00:21:50,290 --> 00:21:52,939 Suze: and make the right moves and know what you need 297 00:21:52,949 --> 00:21:55,839 Suze: to do. So when you do get older, what is 298 00:21:55,849 --> 00:22:01,329 Suze: the right financial exercises that you need to deploy to 299 00:22:01,339 --> 00:22:06,599 Suze: make sure that your money stays healthy and strong as well. 300 00:22:07,140 --> 00:22:10,639 Suze: So you need to listen to these things and not 301 00:22:10,650 --> 00:22:14,719 Suze: just think, oh, this doesn't apply to me. 302 00:22:15,290 --> 00:22:18,229 Suze: Everything I talk about on the Women and Money podcast 303 00:22:18,239 --> 00:22:20,430 Suze: as well as everybody smart enough to listen. 304 00:22:21,359 --> 00:22:25,859 Suze: It applies to all of you at one point in 305 00:22:25,869 --> 00:22:30,380 Suze: your life. If you're older and you already have it together, 306 00:22:30,390 --> 00:22:33,339 Suze: you make sure that your kids know about it. If 307 00:22:33,349 --> 00:22:37,280 Suze: you're younger and you have older parents right now, you 308 00:22:37,290 --> 00:22:41,879 Suze: make sure that your parents know about this. But everything 309 00:22:41,890 --> 00:22:45,500 Suze: on this podcast is to make sure 310 00:22:45,959 --> 00:22:53,280 Suze: that you are the healthiest, wealthiest people around. All right, 311 00:22:53,290 --> 00:22:57,479 Suze: everybody I'm signing off because I'm gonna get ready in 312 00:22:57,489 --> 00:23:00,050 Suze: a little bit. Actually, it's not till three o'clock east 313 00:23:00,060 --> 00:23:02,579 Suze: coast time for the football games. 314 00:23:03,040 --> 00:23:05,569 Suze: But really, there's only one thing that I want you 315 00:23:05,579 --> 00:23:07,929 Suze: to remember when it comes to your money and it 316 00:23:07,939 --> 00:23:14,020 Suze: is this people first, then money, then things now you 317 00:23:14,030 --> 00:23:18,420 Suze: stay safe and stay unstoppable.